Home warranty insurance for tradies

Home warranty insurance for tradies (known as Licensed Builder Home Warranty) is one of the most important forms of insurance there is. Trades home warranty insurance is also mandatory in most states if the work you are completing is over a certain dollar amount. Without trades home warranty insurance, you could face large fines and have to pay any compensation required.

Home Warranty Insurance for Tradies Explained

Home warranty insurance for tradies is a type of insurance that protects the homeowner – your customer. It does not protect you or your business. However, it is still compulsory for certain residential projects costing over a certain dollar amount.

Trades home warranty insurance exists to protect your customer – the property owner - if you produce any defective work or fail to finish the agreed upon work. If you die, become insolvent or ‘disappear,’ the home owner can use the insurance to repair the defective or incomplete work. The finances required to amend your errors are then taken out of your insurance fund. You and your business cannot make any claims on this insurance.

What happens if you don’t have home warranty insurance as a tradie?

  • You will receive a large fine from the state government
  • You will be required to pay for any expenses to fix your defective or unfinished work
  • You can be sued by the homeowner for damages

Requirements of Home Warranty Insurance for Tradies

Home warranty rules are state based. As a tradie, you need to be aware of the requirements for trades home warranty insurance in your state.

In NSW, for instance, if you are completing a residential construction or renovation project over $20,000, you will need trades home warranty insurance (however, if your project is below $20,000, you don’t need to worry about this insurance). Previously, the NSW amount was only $12,000, but this increased to $20,000 in 2012.

In Victoria and South Australia, the limit for trades home warranty insurance is $12,000 as is Western Australia (where it is called home indemnity insurance).

In all circumstances, you should check with your insurance broker as to the state rules and regulations for trades home warranty insurance. This will ensure you do the right thing and don’t run into any trouble with the state government or with your customer.

Home Warranty Insurance for Tradies – How to Apply

Home warranty insurance for tradies is best obtained through an insurance broker or agency who specialises in insurance for the trade/construction industry. They will work with an insurance underwriter to determine what level of insurance you can be covered for and what premiums you need to pay.

You will also need:

  • Registration details for your business, including ABN or Tax File Number
  • Builders licence
  • Details of your earnings, such as profit & loss reports or tax returns
  • Details of your assets and liabilities
  • History of your building work and experience
  • Any information on the particular project you require trades home warranty insurance for

If you have accidentally failed to apply for trades home warranty insurance or didn’t realise that you needed it, insurance brokers can also help you apply for retrospective cover.

Get all your trades home warranty insurance questions answered. Talk to one of our representatives today or apply online to get multiple quotes instantly.


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